European worries hang over markets

<p>  Asian stocks are set to follow negative offshore leads after US markets posted losses in response to growing tension within Europe. The Dow Jones […]</p>


Asian stocks are set to follow negative offshore leads after US markets posted losses in response to growing tension within Europe. The Dow Jones Industrial average shed 0.8% in its six straight days of losses and the longest losing streak in more than nine months. 

Retail and discretionary names were among the worst hit with the likes of Macy’s falling by 3.7% as profit numbers missed market estimates. 

New Corp will probably surprise some with its earnings out this morning Asian time, reporting third quarter adjusted total segment operating income of US$1.38bn, which implies growth of 16% compared to the prior corresponding period. The strong result was driven by large gains in the cable network programming business. 

Publishing saw a large fall, no doubt impacted by recent scandals, but a combination of cable and television growth shows the resilience of earnings composition and quantifies the extent to which publishing actually impacts the total group. 

For Newscorp, operating income growth in the cable networking programming division was driven by double digit growth at the Regional Sports Networks, FX Network and FOX News. International channels grew earnings by 9%, led by double digit increases in Fox International via Latin America and Asia. Advertising revenue at the domestic cable channels were 10% which is a solid outcome given the economic challenges. 

In currency markets, the Australian dollar continues to hold just above parity, last trading at 1.0049 against the US dollar. The Euro remains vulnerable, last at 1.2937 while the dollar yen was flat on yesterday’s levels, last at 79.62. 

Japanese exporters will be eyeing the currency positive very closely, having recently received slight reprieve but not enough to keep them satisfied. 

Gold breached below SU$1600/oz to last trade at US$1590/oz while silver is holding ground above US$29.22/oz. Copper remains slightly above the US$3.60-65/lb support range, holding for now but no doubt will be tested over the next few hours. 

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